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Sunday, 2 August 2015

AMERICAN WORKERS AND THE WELFARE STATE

This article
is part of a 13-question interview about American society that Jaime Ortega, president of "The Daily Journalist"
conducted with me by submitting questions in writing. The first two appear below and the rest will follow in the coming days. The first part about Youth and its role in society is published below.

3) Jaime Ortega: Many companies nationwide complain to the
government that many American workers (not all) do not perform as efficiently
as other foreign workers and illegal immigrants who also work for these same
companies. For example, Alabama recently passed a law where illegal
immigrants needed work permits. Do Americans companies need immigrants? And is
the American labor become lazier compared to illegal immigrants? It
looks like in most universities all the Bachelors of Science are taken by
mostly foreign students and few Americans! Will that have a long effect
repercussion on the US?

JVK: Are American workers “inefficient” (producing more at
a lower cost to their counterparts around the world) or are they the cause for
the lack of “competitiveness”? Are US wages too high and productivity too low,
and is efficiency measured only in terms of maximum profits to the exclusion of
all other factors? Are workers the reason that US companies relocating to
Mexico, Vietnam, China, Brazil and other countries as part of the
de-industrialization process in the last forty years?

The argument that workers are fault for the ills of
the US economy started during the first Industrial Revolution in England more
than two centuries ago. During the Gilded Age of the late 19th
century, the argument of worker inefficiency was used to prevent labor
organizers and keep wages low and government away from regulating hours, safety
and child labor. Clearly, a child, a woman and a minority male was worked more
efficiently because they received considerably less than their white male
counterpart during the period when trusts and cartels enjoyed unquestioned influence
over all levels of government and the courts.

The New Deal
changed labor-management relations, rationalizing the process within the
capitalist system. However, as the US became more hawkish during the Cold War,
domestic policy reflected a rightwing turn as well. The anti-union political
momentum has its origins in the Truman administration that reversed the
pro-labor policies of FDR and used the Cold War as a pretext to impose labor
conformity to domestic policies. Because the economy was in an expansionary mode
during the early Cold War and there were opportunities for the children of
workers to secure an education and move into the middle class, conformity was
inevitable as the American Dream was the reward.

De-radicalized pro-business trade unions went along
with the government on foreign affairs and renounced the class struggle,
focused only on “bread and butter” issues as part of the Democrat Party. Anti-trade
union policies of the Republican Party that identified unions as appendages of
the Democratic Party are part of the reason for the question of inefficiency.
Another issue is related to the justification of globalization that transfers
high-paying jobs to low-cost labor markets, thus driving wages lower in the US.
Finally, there is the issue of preventing unionization where it does not exist,
minimizing the influence of the already weak and ineffective unions, and simply
busting unions as was the case during the Reagan administration. No matter what
the argument, the assumption always revolves around the theme of maintaining
capital’s monopoly influence in policy and maximizing corporate profits no
matter the cost to society. This is no different than what took place during
the Gilded Age.

According to the pro-business Organization for
Economic Co-operation and Development (OECD), Germany has the world’s most
productive labor force, while the US ranks third. Neither Germany nor the US
have low wages compared with China and Vietnam, but they enjoy top world
rankings from a pro-business international organization. Why then do
politicians, the media, and well-paid pro-business consultants and academics-for-hire
to businesses insist the US labor force is the problem to productivity?

On 31 July 2015, the US Federal Reserve released the second quarter labor
report costs revealing that these were the lowest in 33 years. Despite massive
rises in executive compensation and record corporate profits, politicians and
media insist that wages are the problem in the economy. Where exactly is the empirical evidence to suggest that the American
labor force on the whole, whether in the public or private sector, whether in
the office or in the factory, whether in the commercial farm or the
construction site is the cause for productivity inefficiency? If the business
model is flawed, if management compensation exorbitant, if the child labor
factory in Bangladesh makes the exact same garment five times cheaper under
unhealthy and hazardous conditions, why is it the fault of the American worker
and not the factory owner trying to squeeze out higher profits by exploiting
children in the Third World?

The only reason that the US government, businesses,
media and the IMF even raise the issue of worker inefficiency is to demand lower
wages throughout the world, to crush labor unions, and to prevent new ones from
emerging. If a 12-year girl in Bangladesh is making a few dollars a week, but
her adult American counterpart is making $12 dollars an hour, is the conclusion
that the American worker is “inefficient” or that the corporate employer is
exploiting child labor in countries desperate for capital investment and no
laws for children, safety, health and the environment?

It is ironic that politicians, journalist and
economists against raising the minimum wage are either millionaires or very
wealthy who would never concede giving one dollar more of their parasitically-earned
income to reduce the public debt. If they honestly believe workers are not the
people creating wealth, but instead they are the obstacles to efficiency, then
why not abolish all labor laws, all labor-management regulations, outlaw trade
unions and end workers’ rights, and let the employer decide what the worker is
“worth”. If these measured
are followed to concentrate capital even more than it is today in the hands of
the wealthiest one percent, the question arises about what kind of social
structure and political system would evolve in America where the middle class is
presumably its backbone.

Some sectors of the US economy including construction,
agriculture, and manufacturing, employ foreign laborers, some of which are undocumented. This is also the
case with domestic workers in the hotel and restaurant business where wages are
low. Employers prefer to employ such workers because they are diligent, but
also because they earn much lower wages than documented workers. For many
decades employers have made the argument that employing Hispanic and other
non-US-born workers is more efficient for them and they pass on the savings to
the consumer. This is regardless of whether it is a commercial farm or a construction
company. The trade unionists then turn against the undocumented workers,
arguing the government is not cracking down on these people taking jobs away
from American citizens. This is an old story of old immigrant workers making
higher wages turning against the new ones earning much less. The media,
government and businesses then argue that high paid workers losing their jobs
simply do not have the “right skills” for the evolving job market, so it is
their fault. If they just secure more education/training, they too could
experience upward social mobility.

The downward social mobility in America has been
taking place in the last three decades and it is continuing.This has been a subject of many books and
articles as well as political debates, with some liberal suggesting adjustments
to the fiscal system and wage scales and conservatives arguing in favor of
allowing the market to decide and individuals going back for more education to
secure a good job. One area where the young have historically looked for upward
mobility is the college degree, although studies indicate the political economy
and social stratification is such that the average person will change several
careers in a lifetime. Moreover, the demands of the market are such that
whereas in the 1950s a high school diploma was sufficient to secure a job, in
2015 a Ph.D. is no guarantee the candidate will work in her/his field and make
more money than a truck driver.

America’s educational system designed to provide
opportunities for self-enlightenment and marketable skills in the workforce achieved
its goal from the end of WWII until the end of the Vietnam War. When social
welfare began to dwindle as resources shifted to defense and corporate welfare
during the 1980s, radio personality Garrison Keillor made famous jokes about
the unemployable English major. This was an indication that a college degree in
the humanities was hardly sufficient to guarantee a job in the field of
academic training. The reality in the 1980s was that any field outside of the
hard sciences and business was difficult to secure a job, even with a Ph.D. A
decade later, it became difficult to secure a job in fields once thought as
safe, including areas in the hard sciences and law. Individuals with college
degrees had to secure more and different training for employment. By the time
the recession of 2008 hit, it was difficult to find a job in any field even for
graduates of prominent universities.

Besides inability to find employment in the field of
their educational training, college graduates had a massive debt from loans
because costs had skyrocketed as the business model of education meant shifting
the burden from the public sector to the student. High college costs excluded
children of workers and lower middle class that could only afford local
colleges, if at all, or going into the armed forces. Universities responded by
introducing distance learning and e-colleges, as well as eliminating standardized
exams ACT-SAT, both schemes to secure tuition income as competition increased. In
the last three decades, universities have been evolving toward a business model
where the administration behaves like corporate management and the faculty like
workers, and students are consumers. This is reflected in salaries where there
are huge gaps between the millionaire college presidents and professors, with
exceptions in business schools.

It is not only that the corporate model of college has
become very expensive and leaves out those who cannot afford it, it is also the
case that an undergraduate degree is now like a high school diploma in the
1960s in terms of securing employment in a very competitive service-oriented
economy geared increasingly to business and high tech positions amid an evolving
proletarianization social process that provides people with titles such as “assistant
manager” at a fast-food restaurant or an insurance office. College students
know that they are no different than consumers because this is how universities
treat them, their degree is no guarantee of upward socioeconomic mobility, and
society does not value education but wealth that can be acquired by any means
necessary, including unscrupulous or illegal methods. In short, the merit-based
ideal of the 18th century Age of Reason no longer applies in the new
Gilded Age of the 21st century.

The apologists of the
corporate model of higher education argue that the problem rests with students
who are not interested in math and science but opt for the humanities and
social sciences where there is no gainful employment. They point to foreign
students who gravitate toward those fields and become successful. This is
indeed the case with foreign students, at least looking at this issue on its
surface. Beneath this appearance are the following hard facts.

First, High School
students in Europe, Russia and Asia have a much better training in math and
science than their US counterparts because American secondary education has
been deteriorating for decades. Therefore, when foreign students come to the US
it is easy for them to take courses in math and science because of their educational
training. Second, foreign students do
not have language expertise of their American-born counterparts, so they find
it easier to focus on math and science. Third, a foreign student could have
easily stayed in her/his own country to study humanities and social sciences,
as they do, instead of coming here. The reason foreign students come to the US
is primarily for the hard sciences. If they wanted to study poetry, they could
have done so in their own country.

One would be surprised
to discover that not just the US, but the rest of the advanced capitalist
countries have a problem with unemployable college graduates, especially Europe
and in fields of social sciences and humanities just like the US. Therefore, the
problem is not that the US college student is so much different than her/his
counterpart in the much of rest of the world, but that capitalism has a crisis
of overproduction in college graduates as much as it does in every other
commodity. The college student here and world-wide is nothing but a commodity
subject to the market laws of supply and demand. Education is a reflection of the crisis of
capitalism that cannot absorb the commodities it is producing under the existing
system. Because of the “brain drain”, the best and most talented continuing to
leave their countries and come to the US, the long-term impact will be surplus
graduates. The benefits from a surplus college-educated labor force will mean
that employers will demand more for less from their employees. At the
macro-economic level, this means downward pressure on all professions and
living standards owing to excess capacity of college graduates in every field,
including medical sciences. Conclusion: downward socioeconomic mobility as many
studies indicate will continue as much in the US as in the European Union.

4. Jaime Ortega:
1/3 of Americans live on welfare and most of them have no education some even
exploiting for years the free benefits to live more comfortably never working.
It seems like they don’t want to take on many low income jobs, whereas illegal
immigrants and foreigners exploit these opportunities to earn money. Why
haven’t Republicans or Democrats faced these realities?

JVK: According to a study in 2012, 35% of Americans were
receiving some kind of “means-tested program” assistance amid the tail-end of
the recession that started in 2008. The US federal budget in 2014 was $3.5
trillion, of which 34% went for national security and home security while Social
Security, Veterans benefits, Medicare and health amounted to 52%. It is
important to note that if we add research and development, NASA, and other defense-related
spending not budgeted as such, the percentage rises. In 2011 for example the
total costs for defense and related programs was $1.3 trillion, while “human
security” programs that critics dismiss it as wasteful entitlements cost $2
trillion. Investment in human security vs. national security is an ideological
debate among politicians, media, academics and others. Republicans and many Democrats
believe that in an open society government priorities ought to be with defense
not human security.

While very few people would question defense/national
security spending, many since the election of Reagan constantly question “human
security” as a “waste of tax dollars”. Critics argue that such programs only
encourage the poor and minorities to be lazy and parasitic, an argument that
was actually floated in England during the era of Adam Smith at the end of the
18th century. Republicans and many Democrats find nothing wrong
spending hundreds of billions on the parasitic defense industry because this
sector is associated with patriotism, regardless of whether it adds more
security along with a rising public debt. However, these same critics vehemently
object to school lunches to feed the poor, assistance for the mentally ill, subsidized
housing for people that would otherwise be living in parks, and subsidized
health care for the lowest income groups unable to afford immense hospital and
prescription costs. It is important to note that the entitlement program money
goes right back to corporate America – health insurance and corporate-owned
hospitals, supermarket and drug store chains, pharmaceutical companies, and
other businesses.

The objection is that the taxpayer is stuck with the
bill for human security. However, there is silence when it comes to corporate
subsidies and tax breaks for millionaires and billionaires. When was the last
time that the media raised the issue of General Electric and Boeing receiving
US export subsidies, despite the fact that these are extremely profitable
companies? When was the last time that politicians and media objected to local
governments subsidizing sports stadium for football, basketball and baseball,
using taxpayer dollars, instead of building schools, parks and facilities for
the homeless and mentally ill? Why is it acceptable to dish out one billion
dollars for sports facilities in any given city but highly objectionable to
feed, house and provide health care for the poor?

Considering the price of the ticket for a professional
sports event, the government has no problem subsidizing the upper middle class
fans and the investors in sports clubs, but it finds it abhorrent to provide a
school lunch to the poor and medication for the elderly. Democrats and
Republicans alike have no problem providing subsidies, lowering the tax rates
and never closing tax loopholes for the corporate sector, any more than they
have a problem bailing them out when in crisis as in 2008 to the tune of
hundreds of billions in taxpayer money. Who is really parasitic in the fiscal
structure that redistributes wealth from the bottom up, corporations and the
top ten percent of income earners or the bottom one-third of the population
receiving entitlement benefits?

Part of the objection about entitlements is rooted in
racism and xenophobia because of sterotypes that politicians and media have
inculcated into the public. The assumption that the media and rightwing
politicians reinforce is that recipients are black, illegal Hispanics, and lazy
white single mothers in a trailer park. The stereotypes are deeply ingrained in
the public mind for decades because the mainstream institutions project such an
image to justify transferring resources to defense and corporations. The
reality is that the capitalist system is based on structural unemployment
because of the process of appropriation and overproduction on a global scale. Politicians,
business people, the media and many academics from universities to consulting
firms and think tanks agree that “full employment is between 4% and 5%” -this
is the official rate not the unofficial that is much higher, and it does not
take into account part-time work. There is general agreement that a segment of
the “potential workforce” must be outside the “active labor force” on a chronic
basis for the “health” – profitability - of the market economy to keep wages
low.

Of course, one way to deal with the chronically
unemployed is to put them in work house or prison and force them to work for a
room and board inside these institutions, something that many rightwing
elements would love as they romanticize about treatment of workers during the
early Industrial Revolution in Europe. In 1834, the British Parliament passed
the New Poor Law that prohibited relief to any person refusing to enter into a
workhouse that were essentially for profit operations based on slave labor
conditions. This is one way to deal with the issue today amid globalization and
neoliberal policies that dominate not just in the US but globally.

Savings can be realized from putting the chronically
unemployed in institutions, and proceeds could be put to use for more defense
spending so the US could better prepare itself to win wars such as those in
Iraq and Afghanistan, as well as score major victories in covert operations
such as Syria and Libya where US intervention produced even more jihadist
guerrilla movements. Some of the savings could also go to subsidize the largest
banks and corporations in a show of gratitude for taking their profits
estimated at $2 trillion out of the country so they would avoid paying taxes.

Republican politicians and the media are constantly
reminding people that poverty is a cultural problem caused by the individual’s character
flaws rather than the capitalist system that assumes structural unemployment at
5% is “full employment”. When we eliminate the people unable to work because
they are old, or unable because of disabilities, or they have children to raise
this leaves a percentage of able-bodied people who could work at minimum wage
of around $15,000 annually or roughly $4,000 lower than the poverty line which
varies from New York to rural Mississippi. Ironically, critics of entitlements
are also the advocates of not raising or even eliminating the minimum wage so
that more people would live below poverty in unhealthy and hazardous conditions.

It is true that some people on welfare object to
accepting work that pays lower than entitlement benefits including health care
coverage. By contrast, Illegal immigrants have no choice and they take such
jobs because they will live in groups and share expenses for everything. The 11
million undocumented workers in America are doing just about anything they can
from hard construction work in all kinds of weather conditions to farm field
work not because they enjoy it and they can make a decent living at it, but
because the alternative is to return home or die here.

There are studies indicating that undocumented workers
add about 10% of the GDP over the course of a decade. This is in sharp contrast
to the rightwing populist rhetoric that undocumented workers are “taking”
instead of making more wealth. The clear beneficiaries of this are businesses
whose profits remain high because illegal workers are taking jobs that pay at
or below legal minimum wage. Instead of striving to raise their wages to legal
levels, rightwing politicians and the media use the example of the undocumented
workers to lower wages for the rest of the labor force.

The fact that undocumented workers accept very low pay
as a reflection of how employers exploit them can become a model for
labor-management relations as many neoliberal advocates of both political
parties and the right media would like. However, it is important to remember
that when the 2008 recession exploded, many were saying how great it was that
the US has a social safety net – unlike the 1930s – and the impact would not be
as badly felt by society. The most ironic aspect about the debate on minimum
wage is that wealthy politicians voting for tax breaks to businesses and the
upper income groups are advocating maintaining the existing low-wages that have
one-third of the population qualified for an entitlement program.These same critics would never argue in favor
of capping executive salaries and compensation amounting to 400 times higher
than the average wage.

In the last analysis this is an issue of what kind of
society people want as measured by a social contract based on a modicum of social
justice. Looking at the growing income gap in the US in the last four decades,
there is no doubt that social justice is virtually eliminated from any
political debate. Human security issue is one that politicians, media, business, and
academics rarely raise, while they have no problem emphasizing criminal justice
and national security with the“war on terror” as a monumental distraction
from social justice that matters in peoples’ daily lives. Fourteen years after 9/11, people have a realistic appraisal of the level of threat "Islamic terrorism" poses and the degree to which government and media focus on it to distract and impose conformity.

"A
gripping, passion-filled, and suspenseful tale of love, betrayal,
political and religious intrigue, this novel entices the reader’s
senses and intellect beyond conventions. Slaves to Gods and Demons
takes the reader through a roller coaster enthralling journey of
personal trials and triumphs of a family emerging vanquished and
destitute after World War II.

Narrated by a young boy, Morfeos, modeled after the Greco-Roman pagan
deity of sleep and dreams, the book reveals the soul of a people trying
to ascertain and assert their identity while rebuilding their lives and
recapturing the glory of a lost civilization.

Seeking liberation from restraints of time, social conventions, and
binding traditions, the deity of dreams provides the conformist and the
free-spirited characters in the novel with venues for redemption that
are mere paths toward illusions. Exploring the complexities of human
relationships shaped by priest and politician alike, the novel rests on
the central theme that life is invariably a series of illusions, some
of which are euphoric, most horrifying, all an integral part of daily
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Striving for purpose amid life’s absurdities after the destruction of
western civilization in two global wars, the characters in Slaves to
Gods and Demons struggle between holding on to the glory and grandeur of
a pagan legacy and the Christian present shaped by contemporary
secular events in Western Civilization."